his own enterprise
A man is considering putting up his own enterprise, where an investment of 800,000Php will be required and will take 15 years to recoup . He estimates his annual sales at 800,000Php along with the following operating costs.
Materials ............................. 160,000Php/ year
Labor ............................. 280,000Php/ year
Overhead ............................. (40,000 + 10% of sales) Php/ year
Selling Expense............................. 60,000Php/ year
The man will give up his regular job paying 216,000 Php per year and devote all his time to the operation of his business, this will result in decreasing his labor cost by 40,000Php per year, material cost by 28,000Php per year and overhead cost by 32,000 Php per year. If the man expects to earn at least 20% of his capital, should he invest?
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